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Mattel CEO resigns, toy maker results miss expectations

Mattel chairman and CEO Bryan Stockton has resigned after the struggling maker of Barbie dolls and Hot Wheels cars reported fourth-quarter results that fell far short of analyst expectations.

The company said longtime board member Christopher A. Sinclair will replace Stockton as chairman and interim CEO.

The toy maker also disclosed that its net income tumbled 59 percent to $149.9 million from $369.2 million in the three months that ended Dec. 31. On a per-share basis, Mattel earned 44 cents per share in the most recent quarter, or 52 cents per share not counting hits from integration costs and taxes.

Revenue fell 6 percent to $1.99 billion.

Analysts forecast, on average, earnings of 91 cents per share on $2.14 billion in revenue, according to the data firm FactSet.

Mattel has struggled for several quarters now with slumping sales of its iconic Barbie dolls.

Making matters worse, late last year, Barbie lost its top spot on the crucial holiday wish lists of girls to merchandise from the Disney hit “Frozen.” The National Retail Federation’s Holiday Top Toys Survey found that one in five parents, or 20 percent, planned to buy “Frozen” merchandise for their girls. That beat the 16.8 percent that are looking to make a Barbie purchase.

Stockton became CEO in January 2012 and then was named chairman a year later. Sinclair said in a statement from the company that the Mattel board believed it was the right time for a change in leadership to maximize the company’s potential.

Mattel will announce full results from its quarter on Friday.

The company’s stock fell 45 cents, or 1.6 percent, to $27.60 in Monday morning trading after falling as low as $24.88 earlier in the session, while broader indexes slipped less 1 percent. Mattel shares are coming off a year in which their price sank 35 percent, while the broader Standard & Poor’s 500 index climbed 11.4 percent.

Sounds like shaking things up starting at the top is a good idea. Any company culture that gets mired in the weeds that is endless and often pointless meetings, and doesn't put a premium on creativity, deserves to lose. Hopefully new leadership and a new direction will help get Mattel back on track. For obvious reasons (liking MOTUC) I don't want to see Mattel fail or run into issues, but it sounds like they were due for a change.

How does Barbie losing the top girls spot to Frozen hurt Mattel? Mattel makes most of the Frozen toys.

I had the same thought. I mean obviously the fact that Frozen is a licensed property means Mattel keeps slightly less of the profits, but still this seems like a pretty odd reason to point to for the loss when all it's saying is that their former number one girls toy has now been surpassed by a new number one girls toy that Mattel also produces.

I had the same thought. I mean obviously the fact that Frozen is a licensed property means Mattel keeps slightly less of the profits, but still this seems like a pretty odd reason to point to for the loss when all it's saying is that their former number one girls toy has now been surpassed by a new number one girls toy that Mattel also produces.

I'd assume it's more to do with the potential shame for Mattel that their own property was eclipsed in sales by toys from a licensed line. But really it makes sense that kids would be more into dolls and accessories from a hot movie like Frozen than Barbie, a line that's been around in some form literally since the start of Mattel. Not saying Barbie is any danger of losing her perch as one of Mattel's top sellers (the company did make billions in 2014 after all), but outselling Frozen simply makes sense- especially in a hot year overall for Frozen (no pun intended).

Really this should represent Mattel's wake up call that they can't skate on staid IP's like Barbie, Hot Wheels or even MOTU without marketplace innovation- in multiple media outlets both internationally and nationally. They have a strong history of new products taking the market by storm, but it seems like they will forever be stained by missing the boat behind other competitors, as most acutely represented by not snatching up the Star Wars license when it was first offered to them. Some may say, but that's ancient history, however it seems to represent at least to some degree that they don't see the potential of certain creative properties even when placed directly in front of them--- AHEM... Masters of the Universe. And even better for them potentially because MOTU is a property they actually own!

If the 2007 Transformers movie proved anything it's that there is no such thing as "just an 80's toy property". If you know what you're doing, hire the right people who actually appreciate the property and know what to do with it, and can align the stars (both actors and otherwise) just so, success and bags of money can ride their way right to you.

MOTU could save Mattel if they would just put some resources into reviving it for mass audiences again.

I have zero delusions of grander that MOTU alone can save Mattel, but a really good movie/cartoon/multimedia roll out of the property could do them wonders. No single peg on the strategy board is going to equal many dollars for them right now. Their strategy needs to be one of reviving older properties and also bringing in key new ones. Simply licensing from Disney and other companies isn't sustainable- as evidenced by their lackluster 2014 sales figures. They need to think outside the box and perhaps (I repeat perhaps) MOTU could be part of that brainstorming, and at the very least should be part of their overall roll out strategy. To not lean on the good will built up in the minds of many adults who would love to see He-man and his pals done right on the big screen and other media tie-in's would be just plain dumb.

How does Barbie losing the top girls spot to Frozen hurt Mattel? Mattel makes most of the Frozen toys.

JAKKS Pacific also makes Frozen dolls, including the incredibly popular Snow Glow Elsa which probably outsold anything from Mattel last Christmas. Also, Mattel lost the license to Hasbro for 2016 going forward so that's another big blow for them. I assume Disney wants to partner with Hasbro on many of their properties (Marvel, Star Wars, Princess, Frozen) to streamline the licensee relationship.

Honestly, Mattel's problem isn't properties, it's that they're unwilling or incapable of adapting to modern tech, trends, and expectations. Toys aren't what they used to be. They can't continue to be the giant they once were if they don't diversify. They need video games and tv shows and they need to use better production tech and shipping logistics. And they need to do those things well. They can't just check off the idea and hope it'll be successful because it's successful for the people who know what they're doing with it. They can't just rest on their laurels and expect Barbie to conquer every competitor.

It's a larger version of what I've been saying about Masters of the Universe for years. I really believe He-Man can make a comeback in public consciousness, but it can't be done simply through a toyline. It needs a solidly written tv show. It needs video games made by real developers, and not something cheaply licensed to some no-name third party that's only ever made bad sports games. You need to hit what's big, and when something catches on, you need to shift focus to it even if it's not what you expected, and you also need good production values.

This could prove a boon for MOTU, as Mattel hunkers down a bit and is forced to re-evaluate their more neglected properties to shore up some missed forecasts. Maybe they should look into the interactive amiibo/skylanders format for properties like MOTU, as it seems the action figure market has evolved but maybe not enough to compete with other alternatives kids get nowadays. Mattel needs to evolve; it's already got some great properties.

Honestly, Mattel's problem isn't properties, it's that they're unwilling or incapable of adapting to modern tech, trends, and expectations. Toys aren't what they used to be. They can't continue to be the giant they once were if they don't diversify. They need video games and tv shows and they need to use better production tech and shipping logistics. And they need to do those things well. They can't just check off the idea and hope it'll be successful because it's successful for the people who know what they're doing with it. They can't just rest on their laurels and expect Barbie to conquer every competitor.

It's a larger version of what I've been saying about Masters of the Universe for years. I really believe He-Man can make a comeback in public consciousness, but it can't be done simply through a toyline. It needs a solidly written tv show. It needs video games made by real developers, and not something cheaply licensed to some no-name third party that's only ever made bad sports games. You need to hit what's big, and when something catches on, you need to shift focus to it even if it's not what you expected, and you also need good production values.

This is why I fully expect Hasbro to overtake them as #1 toymaker before long (I honestly think it would have happened long ago were it not for things like Hot Wheels, Barbie, and Fisher Price in the Mattel stable). Hasbro has actively cultivated it's in house properties for decades now, keeping them on the pegs and in the public eye. some attempts have been more successful than others, but it gives them a base from which to work. Hasbro is never going to lose the rights to GI Joe or Transformers (unless they sell them off for quick cash as Mattel so foolishly did with MOTU). Their in-house properties are not ignored, and they don't sit around waiting for a studio to make a movie. now, they've had some ventures that failed, like the Hub, but overall they've still done a far better job of keeping the properties they own alive and in multiple venues. Maybe some new blood will shake up the outdated culture at Mattel.

"I will use this power for all the good that can be done, to work for peace, to encourage virtue, and above all, to preserve life in all its forms..." Superman

This is why I fully expect Hasbro to overtake them as #1 toymaker before long (I honestly think it would have happened long ago were it not for things like Hot Wheels, Barbie, and Fisher Price in the Mattel stable). Hasbro has actively cultivated it's in house properties for decades now, keeping them on the pegs and in the public eye. some attempts have been more successful than others, but it gives them a base from which to work. Hasbro is never going to lose the rights to GI Joe or Transformers (unless they sell them off for quick cash as Mattel so foolishly did with MOTU). Their in-house properties are not ignored, and they don't sit around waiting for a studio to make a movie. now, they've had some ventures that failed, like the Hub, but overall they've still done a far better job of keeping the properties they own alive and in multiple venues. Maybe some new blood will shake up the outdated culture at Mattel.

One thing holding Hasbro back is that they are incredibly difficult to work with. I used to be in the toy business about 10 years ago, and Mattel is so much easier to order from and get an account with. If Hasbro moved their business model for specialty retailers out of the stone age, they would already have outgrown Mattel. They have better pricing and strong licenses, but you never get your full order and have to take a lot of what they give you with no say so. Mattel is actually a delight to work with, which is really funny when you think about how awful they are with end customer relations.

This is why I fully expect Hasbro to overtake them as #1 toymaker before long (I honestly think it would have happened long ago were it not for things like Hot Wheels, Barbie, and Fisher Price in the Mattel stable). Hasbro has actively cultivated it's in house properties for decades now, keeping them on the pegs and in the public eye. some attempts have been more successful than others, but it gives them a base from which to work. Hasbro is never going to lose the rights to GI Joe or Transformers (unless they sell them off for quick cash as Mattel so foolishly did with MOTU). Their in-house properties are not ignored, and they don't sit around waiting for a studio to make a movie. now, they've had some ventures that failed, like the Hub, but overall they've still done a far better job of keeping the properties they own alive and in multiple venues. Maybe some new blood will shake up the outdated culture at Mattel.

I agree with most of this. One thing, though, Hasbro is a bit famous for buying up IPs and then doing nothing with them. I know M.A.S.K. is one, but I believe there's others.

Also, reading about how Barbie is a brand that brings in $1 billion really puts into perspective how small potatoes MOTUC is (prprobably about $2 million at best).

This is why I fully expect Hasbro to overtake them as #1 toymaker before long (I honestly think it would have happened long ago were it not for things like Hot Wheels, Barbie, and Fisher Price in the Mattel stable). Hasbro has actively cultivated it's in house properties for decades now, keeping them on the pegs and in the public eye. some attempts have been more successful than others, but it gives them a base from which to work. Hasbro is never going to lose the rights to GI Joe or Transformers (unless they sell them off for quick cash as Mattel so foolishly did with MOTU). Their in-house properties are not ignored, and they don't sit around waiting for a studio to make a movie. now, they've had some ventures that failed, like the Hub, but overall they've still done a far better job of keeping the properties they own alive and in multiple venues. Maybe some new blood will shake up the outdated culture at Mattel.

MOTU could save Mattel if they would just put some resources into reviving it for mass audiences again.

I agree that it could largely contribute to saving Mattel, if handled properly. A big screen movie could certainly help, but I think that a darker, story-arc driven, filmation-esque cartoon could be exactly what MOTU needs right now...something overall child friendly (certainly no darker than the ThunderCats reboot cartoon from a few years back), but grown up enough and visually nostalgic enough to lure back the 80s generation of vintage / filmation fans....a limited web series could be a great way forward with every child on an iphone or ipad nowadays...perhaps launch a MOTU website for this with interactive content...a few crude, but entertaining online games for the under 12's...a competition to win either a MOTUC figure or a rare other MOTU figure (see below) with the release of every new webisode...another line of collectible mini-figures and playsets might be a good idea...2-3 inch trading figures in blind bags...trash packs and related collectible figures are a good example...add a trading card...figures don't need to be MOTUC detailed or accurate...Basically Monsters in my Pocket with some additional paint aps...Supermarket fodder...things have changed since the 80s and this would be the profitable, successful way forward...